CFOs Report Frequent Interaction with Key Executives: CFO Signals

The vast majority of CFOs report interactions with almost all of their company’s key executives on a daily or weekly basis, with the exception of the board chair and audit committee chair, the only executives with whom CFOs interacted less frequently, according to Deloitte’s second-quarter 2015 CFO Signals ™ survey. which tracks the thinking and actions of CFOs representing many of North America’s largest and most influential companies.

Greg Dickinson

“Most CFOs in this survey report daily or weekly interactions with almost all of their company’s key executives—furthering the notion that finance’s role is continuing to expand,” says Greg Dickinson, director, Deloitte LLP, who leads the North American CFO Signals survey.

Questions exploring how CFOs divide their time among CFO roles as steward, operator, catalyst and strategist support this view. Where previous surveys indicated a progressive shift toward the strategist role, the latest survey findings indicate a resurgence in time allocated to the operator role. This leaves the average CFO with a 27% allocation toward each role.

How frequently are surveyed CFOs interacting with other executives? Following are detailed findings:

—Very frequent interactions with CEO: Nearly 95% of CFOs cite daily or weekly interactions with their CEO. All countries and industries are above 80%.

—Very frequent interactions with COO when there is one: Of the approximately 60% of CFOs who say their company has a COO, about 95% of CFOs cite daily or weekly interactions with this executive. COOs appear more common in Canada and Mexico (more than 90% of CFOs of Canadian companies report having COOs versus just half in the U.S.). COOs also appear more common within the Energy/Resources industry, with about 80% of CFOs from that sector reporting having a COO.

—Very frequent interactions with business unit leaders: More than three-fourths of CFOs say they have weekly or daily interactions with business unit leaders (U.S. CFOs report the highest level of interaction at 80%, with Canada and Mexico at 71% and 64%, respectively). The remaining quarter cites monthly or quarterly interactions. Among industries with larger sample sizes in the most recent survey, Financial Services CFOs are comparatively more likely to cite monthly or quarterly interactions with business unit leaders.

—Less frequent interactions with board chair: About two-thirds of CFOs say they have monthly or quarterly interactions with their board chair, with just over 20% citing more frequent interactions. Just 6% claim rare or non-existent interactions. There is relatively little difference by country. Financial Services and Technology* CFOs are comparatively more likely to cite monthly/quarterly interactions over daily/weekly interactions.

—Least frequent interactions with audit committee chair: About 85% of CFOs say they have monthly or quarterly interactions with their audit committee chair, with just 3% citing more frequent interactions. There is relatively little discernible difference by country or industry.

—Frequent interactions with function leaders: The vast majority of CFOs indicate having daily or weekly interactions with the heads of legal, human resources, strategy and risk management, at 89%, 85%, 85%, and 81%, respectively, with significant industry differences for some executives.

Division of Time Among the Four Faces of the CFO

Compared to two years ago, surveyed CFOs report less time spent in their strategist role and more in their operator role:

—Time spent as a strategist declined

since 2013: CFOs say 27% of their time is spent in their strategist role, down from the 31% they reported in the third quarter of 2013. Among the industries surveyed CFOs from the Healthcare/Pharma, Energy/Resources, Manufacturing and Telecomm/Media/Entertainment (T/M/E)* sectors report the most time in the strategist role, while those in Retail/Wholesale, Technology* and Financial Services sectors report the least.

—Time spent as an operator steadily climbing since 2011: The proportion of time CFOs dedicate to their operator role rose to 27%, up from 23% in the third quarter of 2013 and 18% in the second quarter of 2011. Of the industries surveyed, Retail/Wholesale, Technology* and Financial Services CFOs report spending the most time in the operator role, while CFOs from the Energy/Resources, Healthcare/Pharma and Services* sectors report the least amount of time in this role.

—Time spent as a catalyst essentially unchanged: CFOs’ time spent in their catalyst role held relatively steady at 23% (versus 24% in 3Q13). CFOs from the Services* and Healthcare/Pharma sectors report the most time in the catalyst role, as do those from the Technology sector.* CFOs in the Financial Services, Retail/Wholesale and T/M/E* sectors report the least amount of time spent as a catalyst.

—Time spent as a steward essentially unchanged: CFOs say 23% of their time is spent in their steward role, up only slightly from the 22% they reported in 3Q13. Technology* and Financial Services CFOs report the most time in this role, while Healthcare/Pharma, Manufacturing and Services* CFOs report the least.

—Some country differences: U.S. CFOs report a strong focus on both their strategist and operator roles. CFOs of Canadian organizations report roughly equal focus on all four roles. CFOs of Mexico-based companies report a very strong focus on their strategist and operator roles, with a significantly below-average focus on their catalyst role.

“The survey’s findings seem to indicate a resurgence in time allocated to the operator role, a result that appears driven by growing CFO efforts to build finance organizations that take a broader, stronger and more cost-effective role in helping the business deliver on strategies,” says Mr. Dickinson.

About the Survey

Each quarter, CFO Signals ™ tracks the thinking and actions of CFOs representing many of North America’s largest and most influential companies. For the second-quarter 2015 survey, 101 CFOs responded during the two-week period ended May 22. Seventy-one percent of respondents are from public companies, and 84% are from companies with more than $1 billion in annual revenue. For more information about the survey, please nacfosurvey@deloitte.com .

*Asterisks indicate industries with sample sizes of less than five for the second–quarter 2015 survey.